Governance and Governing Documents

Governance and Governing Documents

Definitions

Governance – Establishment of policies, and continuous monitoring of their proper implementation, by the members of the governing body of an organization. It includes the mechanisms required to balance the powers of the members (with the associated accountability), and their primary duty of enhancing the prosperity and viability of the organization.

Governing Documents – These are the documents that describe how the condominium is governed.

Condo-Ology® Certified Governing Documents – Are documents that promote transparent accountability and are drafted by those that are being governed (the owners).

The Condominium Act of Ontario is the law, all additional governing documents for an individual Condominium Corporation such as the Declaration, By-laws, Rules and Regulations etc. are the Owners to take ownership of (those that are being governed); not the provincial government, certainly not the legal profession and not even the Board.

All governing documents must be in compliance to the Act, or better yet, exceed the various requirements in the Act; this is the only requirement of governing documents.

The issue is that all original governing documents are created by lawyers for developers; some are excellent but unfortunately the majority are designed to benefit the developer, full of legalese, practically impossible for the average Owner to understand and certainly cannot be considered quality governing documents.

Proactive Boards have prudently replaced the original documents (namely by-law(s)) by using what their condo lawyer suggested and supplied. The typical lawyer supplied (boiler plate) documents will solve some issues but they continue to be difficult to understand and rather than benefiting the developer, the documents tends to give the Board of Directors unfettered powers which should be unacceptable for all Owners.

Holy Grail explanation for Poor Condo Docs

“There is a wide spectrum of condo corporations. At one end of the spectrum are condo corporations involving many hundreds of units either in a high rise configuration or spread out in a townhouse complex? At the other end of the spectrum are condo corporations with relatively very few units. When a lawyer is retained to assist in the drafting of documents there is a tendency to draft the “safest” (which is usually the easiest) to cover the spectrum. This translates into vesting a Board with maximum unfettered powers.

This unfettered powers approach might be suitable for condo corporations with large numbers of units in the modest to mid price range. At the far end of smaller condo corporations with high priced units with a majority of resident owners it is to be expected as well as reasonable that owners in this type of a condo corporation would want to have more “input” into the management decisions in particular if they involve the units.”

Rino Stradiotto QC – Bio below

Lead owner of overseeing the drafting of Simcoe Condominium Corporation #408 amalgamated Declaration and By-law,

Retired Partner from Borden Ladner Gervais (BLG) LLP,

Received the Ontario Bar Association’s Award for Distinguished Service,

Appointed Queen’s Counsel,

Inducted as a Fellow of the American College of Trial Lawyers,

Awarded the Law Society of Upper Canada’s prestigious Law Society MedalPassed and

President of the Medico-Legal Society and the Advocates Society.

The above holy grail comment of Rino’s was made during an amalgamation exercise in which the owners of three corporations amalgamated and used Condo-Ology® principals in creating their new Corporation’s Declaration and By-law. The only comment of Rino’s which I do not agree with is the suggestion that maybe only higher priced units in smaller Corporations would want to have more “input” into the management decisions. I believe all Owners, regardless of size or value would like to have more “input”.

Points of Interest

Only lawyers can register governing documents at the Land Registry Office (LRO) in Ontario.

Cost for registering a By-law should not exceed $200.00 – $300.00 (including taxes, disbursements, fees etc.); any more than this requires an explanation.

Condo-Ology® may have invented the first table of content for By-laws. Seriously, check your own Corporation’s general By-law – must ask WHY?

An amendment to a By-law causes additional confusion. The cost to register a By-law amendment is the same for a completely new By-law. Question your lawyer if they suggest only an amendment?

Include the Corporations definitions within the Declaration, By-laws and Rules and Regulations – repetitiveness assist with over all understanding.

The Land Registry Office (LRO) takes great care in the registration of a Declaration because of various legal requirements.

The Land Registry Office (LRO) does not even look at By-laws for Corporations less than 450 units (no idea of the registration process of Corporation with over 450 units) because the By-law(s) are owned by those being governed.

If your lawyer states the LRO will not accept a provision in a proposed By-law, or only a lawyer is allowed to communicate with the staff at the LRO, he/she is misinformed or is intentionally misleading the Owners. Consider changing lawyers.

In the spirit of Condo-Ology® the Owners of the newly amalgamated Corporation (Simcoe Condominium Corporation #408) are sharing (‘paying it forward’) their Condo-Ology® Certified Declaration and By-law, so fellow Owners seeking more accountable and transparent governing documents can benefit;

Financially, depending on the Corporation only minor tweaking maybe needed.

Saving a considerable amount of time and effort in the drafting.

Learn from lessons learned

Copies of SCC 408 Condo-Ology® Certified Declaration, General By-law are below as well as a brief history (with pictures) of the community known as Mariners Haven.